New Reporting Requirements: What You Need to Know About Beneficial Ownership Information

What is the Beneficial Ownership Information Report?

In 2021, Congress enacted the Corporate Transparency Act to curb illicit finance. Effective January 1, 2024, this law requires many companies in the United States to report information about their beneficial owners—the individuals who ultimately own or control the company—to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury. The process is simple, secure, and free of charge, and unless there are updates or corrections, the report only needs to be submitted once.

Who Has to Report?

Most companies, including corporations, limited liability companies (LLCs), and other entities created by filing a document with a secretary of state or similar office under state or tribal law, must report their beneficial ownership information. Foreign companies registered to do business in any U.S. state or Indian tribe are also required to report. Given the narrow scope of exemptions, it is very likely that your company will need to report.

Who Does Not Have to Report?

There are 23 types of entities that are exempt from reporting requirements, including publicly traded companies, nonprofits, and certain large operating companies. For a detailed list of exemptions and to determine if your company qualifies, please review Chapter 1.2 of FinCEN’s Small Entity Compliance Guide at https://www.fincen.gov/boi/small-entity-compliance-guide

When Do I Report?

• Companies created or registered before January 1, 2024: Must report by January 1, 2025.

• Companies created or registered in 2024: Must report within 90 calendar days after receiving notice that the company's creation or registration is effective.

• Companies created or registered on or after January 1, 2025: Must file within 30 calendar days after receiving notice that the company's creation or registration is effective.

• Updates or corrections: Must be submitted within 30 days of any change.

How Do I Report?

Reporting is done electronically through FinCEN’s website at www.fincen.gov/boi. After submitting a completed report, the system provides a confirmation of receipt. To ensure the process is easy, please watch the 5-minute instructional video on the FinCEN website (www.fincen.gov/boi) that guides you step-by-step on how to file the report online for free.

We’re Here to Help

At Steven A Carmina Certified Public Accountants, we are committed to helping our clients navigate new compliance requirements like the Beneficial Ownership Information report. If you have any questions or need assistance with your reporting obligations, please don't hesitate to reach out. Our goal is to ensure you remain compliant while focusing on what you do best, running your business.

Stay compliant, stay informed, and let us help you with your accounting and tax needs. Thank you for being a valued client.